The escalation of an embezzlement: Court documents offer new details into Yurok conspiracy case

A nearly $1 million embezzlement case that shook the local biology community and brought down a Yurok forestry official began with a single inflated invoice aimed at handing out some employee bonuses, court documents show.

Former Yurok Tribe forestry director Roland Raymond has pleaded guilty to a single federal count of conspiring to embezzle funds from an Indian tribal organization and, according to his attorney, is currently helping prosecutors investigate a pair of local biologists who allegedly helped him commit the crime.

Mad River Biologists founder Ron LeValley and Sean McAllister, one of the company's biologists, were charged in February 2012 by the Del Norte County District Attorney's Office with conspiracy and embezzlement, and authorities alleged they were key components of a complex scheme that allowed Raymond to bilk hundreds of thousands of dollars in federal funds.

State charges against the pair were dismissed in January, reportedly to make way for federal prosecutions, but it remains unclear if the U.S. Attorney's Office will pursue charges against the biologists.

Raymond faces a maximum sentence of five years in federal prison and a fine of more than $1.5 million when he comes before a federal judge at a sentencing hearing scheduled for Oct. 1. Documents in Raymond's federal court file shed new light on the alleged embezzlement, detailing how it began with a single fudged invoice and grew over the course of three years into a systematic pattern of fake invoices, money transfers and cash payments.

The documents also indicate that Raymond developed a cover story in case anyone ever came to question why LeValley was writing checks out of his personal bank account to the forestry director totaling hundreds of thousands of dollars.

The local biology community was shocked in February 2012 when authorities served a number of search warrants throughout the county, alleging that Raymond, LeValley and McAllister used an elaborate system of fake invoices, false purchase requests and electronic bank transfers to embezzle more than $870,000 in federal funds from the Yurok Tribe during a three-year period of wildlife preservation studies.

The scheme allegedly saw LeValley and McAllister submit at least 75 false invoices between 2007 and 2010, billing the Yurok Tribe for wildlife surveys their company never performed in the "Gerber/Gleason, Cook Kopalla and Green Diamond tracts of land," according to investigative reports.

According to court documents in the case, LeValley and McAllister are alleged to have divided the money paid to the company between themselves and Raymond, with the bulk going to the former forestry director.

The surveys that allegedly were never conducted primarily purported to be for spotted owl research aimed at determining which tracts of tribal properties could be logged. It's unclear whether the alleged conspiracy impacted any timber harvest plans or may have led to the destruction of habitat forests of northern spotted owls, a federally endangered species.

While the particulars of how Raymond and the two biologists allegedly embezzled funds from the Yurok Tribe have been known for more than a year, recently filed documents in Raymond's federal case offer the first insight into how the former forestry director solicited the help of a pair of well-respected biologists to aid the alleged conspiracy.

According to the documents, Raymond told LeValley sometime in 2007 that he wanted to pay him, other Mad River Biologists -- referred to as MRB -- employees and tribal forestry and fire crews a bonus.

"Raymond suggested that MRB submit an inflated invoice to the Yurok Tribe for an additional amount to cover both the MRB and non-MRB employee bonuses," the document states. "(LeValley) agreed to do so."

The following year, according to the documents, Raymond asked LeValley -- with whom Raymond had worked for more than a decade -- and Mad River Biologists for additional favors, including asking LeValley to submit false invoices to generate cash for a tribal youth basketball team and to pay the salary of Raymond's teenage daughter, who Mad River Biologists had hired on as a summer employee.

The embezzlement escalated in October 2008, according to the documents, with Raymond obtaining tribal approval for a $98,000 environmental surveying contract with Mad River Biologists. Raymond told LeValley that he did not have any money in his department's budget to pay for fire prevention and forestry work, and asked LeValley to submit regular false invoices while funneling the cash back to Raymond, less 20 percent to "cover MRB's taxes," so the forestry director could use the money to keep his department functioning.

According to the documents, LeValley agreed to the arrangement.

While Yurok Tribe timber harvesting ground almost to a halt in 2009 and 2010, and Mad River Biologists did very little work for the tribe, the invoices kept coming in, according to the documents, with the company billing the tribe $411,000 in 2009 and $441,000 in 2010. Of the $851,000 Mad River Biologists erroneously billed over the two-year period, $695,000 was funneled back to Raymond in cash or by check, according to the documents. That leaves $156,000 -- about 20 percent -- that apparently stayed in the hands of Mad River Biologists.

"Raymond did not use the money he received from MRB as a result of the inflated or bogus invoices to pay fire crews or work crews," the document states, drawing no conclusions as to how the $695,000 was actually spent.

The document includes a pair of emails from Raymond to LeValley in which Raymond suggests that Mad River Biologists use a portion of its cut to essentially create a slush fund account to make it through periods when cash is in short supply because of late payments by contractors.

Additionally, Raymond notes that "bonuses to your staff are on again this year," and says LeValley can "set up a nice little R&R outing for your staff, and I will pay via invoice."

In a separate email included in the documents, Raymond suggests that he and LeValley use a portion of their funds to put a new roof on the house of a Mad River Biologist employee, who is also a Yurok tribal member. In one e-mail, Raymond replies to some concerns LeValley apparently raised about the number of checks being written to Raymond from his personal bank account to funnel money back to the forestry director from the fake invoices.

"Back to your concern on the checks," Raymond wrote, according to the document, "just remember that you are buying a lot of native baskets from me that are valued according to market value for works of art that go very, very high on the open market. I have much more than $100,000 worth of them. In the event we get a letter (questioning payments from LeValley to Raymond), you immediately tell me, I deliver to you, you show off your new collection (it is an impressive one)."

Numerous attempts to reach LeValley and his attorney for this story were unsuccessful. McAllister's attorney Greg Rael declined to comment.

"I don't want to make any comment while charges are pending," he said.